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CIR
ONE LINE: Administrative rule or regulation
cannot contravene the law on which it is
based. (
Sec.4.105-1 of RR 7-95 is an administrative rule
and regulation implementing an existing law
Term used inTanada v Tuvera)
NATURE:
Motion for Reconsideration of SCs Decision dated
April 2, 2009 which granted the
consolidated petitions of petitioner Fort Bonifacio
Development Corporation (Corp.) where the C CIR
was (1) restrained from collecting from the Corp. the
amount of P28,413,783.00 representing the
transitional input tax credit due it for the fourth
quarter of 1996; and (2) directed to refund to the
Corp. the amount of P347,741,695.74 paid as output
VAT for the third quarter of 1997 in light of the
persisting transitional input tax credit available to
the Corp. for the said quarter, or to issue a tax credit
corresponding to such amount.
FACTS:
In the April 2, 2009 Decision, which is what CIR
wants to be reconsidered in this case, the
Courtstruck down Section 4.105-1 of RR 7-95 for
being in conflict with the law. It held that the CIR had
no power tolimit the meaning and coverage of the
term"goods"in Section 105 of the Old NIRC sans
statutory authority or basis and justification to make
such limitation. This it did when it restricted the
application of Section 105 in thecase of real estate
dealers only to improvements on the real property
belonging to their beginning inventory.
ISSUES:
1. WON CIR Revenue Regulations 7-95
validly repealed Section 105 as amended by
EO273.2. WON CIR
Revenue Regulations #6-97 repealed CIR Revenue
Regulations #7-95
HELD:
1. NO, admin rule and reg less than statutes 2.
YES, no repealing cause does not mean alack of
intent to repeal.
1. + EO No. 273 [1987] contains first VAT law.It
amended several provisions of the InternalRevenue
Code of 1986 (Old NIRC). In anticipation of the
ISSUE S
1.WON respondents liability to pay value added tax need not
be stated in the sub-contract agreement form part of, and are
deemed incorporated and read into said agreement. (YES)
2.WON respondents are deemed to have already paid value
added tax merely because respondents had allegedly issued
receipts for services rendered.
R U L I N G : The petition is bereft of merit.
1st ISSUE: FOR LACK OF ANY STIPULATION
REGARDING THE SAME IN THE PARTIES SUBCONTRACT AGREEMENT, SC RULED THAT SHOULD
NOT DEDUCT ITS E-VATPAYMENTS FROM THE
RETENTION MONEY DEMANDED BY THE JOINT
VENTURE.